International Bank Accounts: Must-Have Business Feature List
If you're considering an international bank account for your business, it's essential to be well-informed. With hundreds of new banking solutions appearing every day, choosing the right one for your needs can be daunting. While many options seem similar, they can vary significantly in terms of currencies, fees, features and hidden details. We know the onboarding process can often be long and tricky for businesses with international payment needs, and even more so if you have non-resident business owners. That is why we've made this article to save you time and provide insights on what to look for in a cross-border banking solution, so you choose the right match for your business from the start.
Existing options for international banking
The landscape of international banking is divided into two key sectors: traditional banks, with their long-standing reputations but often costly and cumbersome processes, and non-bank financial solutions, known for their innovative approaches to global finance.
Global accounts with traditional banks
Traditional banks, especially ones with physical branches in multiple countries, are a reliable choice for businesses seeking a strong international presence. These institutions offer a range of international services, including foreign currency accounts, wealth management and international trade finance. However, they often have limited payment options compared to their non-bank digital counterparts and can come with higher fees. Moreover, their eligibility criteria might be quite strict – most banks have minimum balance or company turnover requirements (e.g. Lloyds Foreign Currency Accounts are offered for businesses with an annual turnover of £3-25m.
E-money multicurrency account for business
Non-bank financial solutions are a great fit for small to medium-sized businesses or any company looking for flexibility and innovation in their banking needs. These modern alternatives typically have fewer eligibility requirements, making them more accessible to a wider range of businesses. They provide streamlined, technology-driven services, such as quick online transactions, local payment options in different markets and lower fees. Their digital-based nature allows them to save on maintaining branches while often (however, not always) providing better customer support.
A checklist when choosing international banking services
Let's look at the key aspects to consider when choosing a provider for international banking services.
When selecting a service for international banking, the ability to handle multiple currencies is vital. Check which currencies are available, including those you deal with regularly. Services like MultiPass offer over 30 currencies, which is a key advantage over average high-street banks.
Investigate the service's support for both inbound and outbound payments in your key currencies. Understand that the cost for inbound and outbound transactions may vary.
Inquire whether you can hold different currencies in your account if you require this for purposes like hedging. Some services may offer currencies only for transactional purposes.
Additionally, compare the exchange rates. Traditional banks often have high markups of 2%-3% or more over the interbank rate for currency conversions, whereas some Electronic Money Institutions (EMIs) can offer rates as low as 0.2%-1%, leading to significant savings.
While many financial institutions offer transactions in numerous currencies, their ability to send them globally can vary. For instance, a service may support dollar or euro transactions, but it might not be capable of sending them to every region you operate in, such as specific countries in Asia, Africa, or South America. Therefore, it's important to verify not just the currency support but also whether these currencies can reach your business partners wherever they are located. This is particularly essential if you have a diverse international customer base or suppliers in various parts of the world.
Moreover, some platforms may offer different choices of currencies and destinations for their customers, depending on their country of business registration.
Payments vial local payment schemes
After confirming that the provider is able to send and receive payments in your chosen currencies to the required destinations, you might wonder: how quickly will they be processed, and what are the costs involved? It's important to check for payments via local schemes, which are ideal for regular transactions in foreign currencies. E.g. European banks use SEPA for domestic payments, Australian – AusPayNet, Singapore – FAST, etc.
Traditional banks typically rely on SWIFT for international payments, a process that can be lengthy, involving compliance checks and fees from each participating bank. On the other hand, local payouts are usually completed within hours or one business day, and tend to cost much less due to no intermediaries (e.g. £0.50 per payment versus £20-£40 per payment).
Local account details
Now you've identified that your bank or PSP can make quick low-cost local payments. But is it important to receive them just as quickly? In this case, ask if they offer local account details. For example, at MultiPass we offer IBANs in Europe, account numbers & sort codes in the UK, and account & routing numbers in the US. This is convenient as you can add them to your invoices, allowing foreign customers to pay the same way they would a local company – without extra costs on their side. This not only simplifies payments for them but also accelerates your cash flow.
Does your business require subscriptions to online tools or advertising services? Do you have local expenses that necessitate a card, or do your employees need cards for business trips? When choosing a provider, check if they offer physical or virtual cards, the number you can hold simultaneously, the monthly fee, ATM withdrawal limits, and the markup on transactions in foreign currencies.
Check licenses & safeguarding
Verify that the institution, be it a traditional bank or an EMI, is registered with regulatory authorities such as the FCA in the UK or equivalent bodies in other countries. This information should be readily accessible on their websites. For EMIs, check for the existence of safeguarding measures to ensure the safety and security of your funds.
Anyone who has handled payments to foreign markets, especially to more exotic locations and for high-value transactions, knows that delays or declines often occur due to compliance checks and complex international regulations. If your business relies on time-sensitive payments, these issues can bring a burden on your liquidity. It is important to have the ability to quickly reach out to your advisor to resolve any issues as soon as possible. However, this level of support may not be readily available with traditional banks, where private managers are often reserved for larger clients, typically those with turnovers of £5 million or more.
Depending on the specifics of your business, you may consider additional tools valuable such as:
- Multi-user access: Ideal for businesses that operate with multiple teams or departments needing access to banking operations. This feature allows for the creation of different user roles with specific permissions, enhancing collaboration, oversight, and security.
- API integration: Beneficial for tech-oriented businesses or those with specific payment needs. It allows for the creation of custom payment scenarios and integration with existing business systems for streamlined financial operations.
- Mass payouts: Crucial for companies that regularly make bulk payments, such as those with a large number of vendors, freelancers, or a significant workforce.
- Mobile apps: Essential for businesses that prioritise mobility and efficiency, can be convenient for small companies where decision-makers need to manage finances on the go.
- Accounting and invoicing tools: Particularly useful for startups and young entrepreneurs who may be new to accounting.
How to open an international account with MultiPass?
The process is simple and fully remote. Are you a person who likes reading manuals? Read more about the onboarding and required documents.
Do you prefer to jump right in? Proceed to the registration form, it's self-explanatory. Our professional banking specialists are here to help any step of the way.
How do I transfer money to an international bank account?
For a one-time payment abroad, use a standard international transfer. For this, you will need the recipient's IBAN and SWIFT/BIC code. For regular payments, consider a multicurrency account with local payment options in the recipient's country which usually come with lower fees.
Can I open an international bank account?
Yes, you can open an account with a bank or a digital provider. Traditional banks often cater to high-net-worth individuals and businesses, offering options like foreign currency accounts. For others, digital services like Wise, Revolut, or MultiPass are more accessible options. In all cases, check your eligibility with the institution you choose.
What bank account can be used internationally?
Although many UK banks offer international banking services, HSBC, Barclays, and Santander have a notable presence with branches overseas, catering to a wide range of international needs. Beyond traditional banks, there are also non-bank financial institutions that offer global banking services, serving as alternative options for both individuals and businesses seeking global financial solutions.
Pay in 30+ currencies globally with a single MultiPass business account